Today the big news on Wall Street was Anadarko Petroleum Corp (APC) acquiring both Kerr-McGee Corp (KMG) and Western Gas Resources Inc (WGR) for a whopping total of $21.1 billion cash.  The acquisitions will more than double Anadarko's sales and add to their reserves and regions for natural gas drilling.  The common stock of Kerr-McGee and Western Gas Resources are up 36% and 46% respectively.

I believe this is the (necessary) start of a wave of consolidations in the natural gas and energy sectors.  Two of my holdings, Chesapeake Energy Corporation (CHK) and XTO Energy (XTO), are prime acquisition candidates because of their smaller market caps, high growth in sales, and significant reserves.

One final note:  Insiders at both Chesapeake and XTO have been purchasing shares lately.